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like all standardized medicare supplement plans, they pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs every year. call today to request a free decision guide. with this type of plan, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and you'll never need a referral to see a specialist. if you're thinking about your options, call today. when you call, request your free decision guide. and find the aarp medicare supplement plan that may be right for you. >> we don't have a lot of time. i see what you're saying now. your version of rising above is that we go over the cliff to focus everyone on how important the abyss is so that we do something serious about the abyss. >> i'm not advocating going over the cliff. >> i kind of have for the whole show. >> i want us to get a frame work that we get a grand bargain, address the long run fiscal problem in a way let's try not to -- >> he's trying to force the issue. >> you think so too. >> that's the way we'll get to solutions. i want to

most of that is in medicare. there needs to be restraint in medicare. you know, my think tank put out a plan to save $385 billion over the course of a decade in health care savings. >> how is it doing? >> we're trying to be serious about that, largely through trying to produce better delivery with more delivery reform, more accountable care, more value based medicine. more special in the health care system. we got to bring those costs down. we also kind of -- we need to expect a little bit more from wealthier medicare recipients. so i think there's got to be balance in the plan. and i think that in the end of the day, that's what the -- a big deal is all about. it's trying to get, you know, find both sides come together on that. but clearly there has to be revenue in this. >> john, if the president calls you up, and said, look, i need your advice, where can we give, right now, if we have to give a little to make this all happen, what are the -- what would you be willing to offer up? >> well, you know, i don't think -- again, i think if you'd asked me th

the sink guegle biggest driver medicare. so if we don't make those tough decisions now, all we've done is a european style kick the can down the road and, you know, it's tough to cut entitlements and it's tough to cap deductions. austerity doesn't have to look like just taxing your way out of it. if you want to not work, you just tax your way out of it. >> i think we have to remember that this is politics and not economics going on here. that's the most important thing i think people have to remember. and we know we want more revenue and cut spending. that's why we have the problem to begin with. you have to accept that issue. le politicians aren't willing to accept that issue yet. both are at extremes. if you accept they're both at exseee extre extremes, how did we raise revenue. because the politics, not because of economics, they will not raise marginal rates. >> although we have heard some people say they would go along with that. >> i agree. the center is actually saying that. but i think -- so if the democrats know tha

what you will find, means testing for medicare is on the table. agricultural subsidies, something the democrats want to target. additional discretionary defense cuts and raising retirement age, we think saves about $100 billion. take a deep breath, total it all up, show you what we've got. revenue. 1.2 trillion for dems. assuming you use the democrats definition where tai are. >> i have a question. for raising the retirement age, that's not anything that's going to happen in the next 10 years, right? talking about doing this way down the road? >> further down the road. >> these aren't savings you'll see in the next 10 years. >> you're right. it would not be within the budget window, a correction right there. >> not that complicated, just want to follow along. >> 2$2.4 trillion for the dems and 1$1.9 for gop. it's the spending side. the revenue, seems like they're a lot closer than they were and maybe joe knows better the difference between 400 thousand a million, is that an unbridgeable gap if you hit 750? that's the best i can do. >> the trillion

let's take medicare as an example. >> millionaires and billionaires use it. >> in medicare as an example, there are two voluntary programs, part b, which is physicians and outpatient, and part d, prescription drugs. 95% of americans get a 75% subsidy for voluntarily signing up on those programs irrespective of their income and wealth. is that a safety net? no. and by the way, the affordable care act which expanded government promises will cost $12 trillion more than the politicians claim. government's grown too big, promised too much, waited too long to restructure. we need to get on with it. we need to make phased changes that we'll get the miracle of compounding working for us rather than against us and yes we need more revenues. how you generate the revenues matters. we need to do it through comprehensive tax reform. >> david, you're here until 9:00, you'll be back. >> i look forward to it, i'll be back. sons of the american revolution and cpa, that means i'm a patriot who can add. >> you're advertising you're a cpa? >> what's wrong with that? >> in case you have some greeks afterward

all medicare supplement plans let you keep your own doctor, or hospital that accepts medicare. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn't pay... and save up to thousands of dollars in potential... out-of-pocket expenses with an aarp... medicare supplement insurance plan... insured by unitedhealthcare insurance company. call this toll-free number on your screen now... for this free information kit, including this... medicare guide and customized rate quote. welcome to the world leader in derivatives. welcome to superderivatives. >>> welcome back to "squawk on the street" >>> welcome back to "squawk." courtney reagan joins us with more on it. courtney. >> reporter: hi, good morning to you, andrew. it's hard to think of a company more american than ralph loren. he's not a historic polo player but rather an aspirational man. he designs clothes so we can dress for if life we want. that strategy has catapulted that company to a $16 billion company. sitting just below all-time highs we hit two weeks ago. ralph lauren's retai

and you should not be looking at a time in the medicare age. you should be looking at payroll cuts, instead. that's a real issue. >> theorizing above a little bit. i think the campaign is taking hold. i think they finally turned on cnbc and saw it and said, you know what? these guys have a point. >> the one thing that's crystal clear is if they do get a deal done in the next week or so, this will be a very big christmas present for the markets. right now, there is so much money sitting on the side lines, not junk among big american companies. you had ge's jeff immelt come out yesterday indicating yet again so much as investment is being put on the side while people are waiting for clarity and investors that have been running away from the stock market for the last few weeks could come back again if they think there's some kind of deal. if you look at the figures yesterday, you had about $240 billion going into bond funds so far this year. you've had 127 coming out of equity funds and that's partly because of the concern about where we're going

you raised the medicare age from 65 to 66. first of all, a bunch of those seniors 65 and don't have medicare go on medicaid, another government program and the youngest healthiest in medicare. i don't think it's a good idea in terms of the health care system but doesn't save you much money. >> would you support lowering the age from 65 to 64. >> you lower the able, you're increasing the unfunded liability associated with medicare. during health care reform people said let's eliminate the 65 age and put all americans on medicare. that may have been a simpler idea but the medicare and health care system are inefficient enough that would create a huge long term liability for the government. >> it's great, congressman, you're more reasonable than our libertarian guest host. >> that's what we were talking about earlier. >> i saw it. the idea you said raising the age -- >> i did not say it. i was advancing the liberal argument because the government can bargain with a larger pool. >> medicare is so -- anyway, congressman heiimes we

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all medicare supplement plans let you keep your own doctor, or hospital that accepts medicare. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn't pay... and save up to thousands of dollars in potential... out-of-pocket expenses with an aarp... medicare supplement insurance plan... insured by unitedhealthcare insurance company. call this toll-free number on your screen now... for this free information kit, including this... medicare guide and customized rate quote. >>> we're back on this wednesday morning. the new york auto show is kicking off this week. we find phil lebeau with a very special guest from hyundai this morning. >> thank you, andrew. we have yet another "squawk box" exclusive and unveiling avenue model with john krafcik, head of hyundai of america. let's show people the new 2013 hyundai santa fe. >> there you go. >> people will be surprised by this. tell me about the philosophy behind this. >> we replaced every model in our lineup in the last two years. every single hyundai is brand new except santa fe. one of th

medicare/medicaid. what would be your issue with president obama's economic policy or do you have a different point of view? >> i'm a little troubled by the size increase in the defense. i'm all for a very strong national defense, but even the defense department has said that they could do with less and he's talking about attaching it to the cost of living and watching what happens. it would be an enormous increase in spending there. >> what about the massive tax cuts? >> i'm sorry. >> go ahead on the tax cuts and then i have a question. i believe in cutting taxes, i certainly did it as a governor over and over again. but you didn't can't do just tax cuts. and this is the problem with our primary system it forces the candidates to the right and left. mitt mift signed a no new taxes pledge. how you get around that and still address loopholes that everyone agrees need to be closed. >> do you think this is a problem with the primaries because the candidates are pushed so far right and so far left. mitt rom

i think we need to reform medicare. a lot of problems on systems exist because of the way medicare buys services biological weapon need to pay market for insurance where it's affordable and people own it. >> we'll see what happens in just about an hour. >> thank you very

if i go to the hospital i pay -- my insurance pays $1.25 of my $1 of cost because medicare is paying 85 cents of their $1 of cost. but directionally i'm right on those numbers? >> correct. and that is the real problem. what bothered me at the supreme court when i went to the oral arguments on the individual mandate, the uninsured are driving the cost you up. they are but it's at the margin. what really is driving the cost up is government interference in health care and the fact they don't pay for what they have promised. >> the actual cost. they're not paying for the cost. their costs are too high to begin with, right? >> when you talk about high costs, look at 2014. when the subsidies can kick in and the exchange and people who earn $85,000 are going to have their insurance subsidized by the government if their employer drops them, and i promise you they will, this cost goes through the roof. no one has any idea -- they talk about $1 trillion orred 2 trillion this could cost $3 trillion to $5 trillion. >> representative welch, one last word. >> if you have a fee system where it enc

people don't want medicare trucked with. >> governor rendell when you look at the situation with medicare there's something that has to be done. we are spending that money faster than we can bring it in. >> of course. >> there is a massive overhaul that needs to be made. >> absolutely, of course. i mean, becky, the sheer fact of what we democrats have to get across to our constituents in a courageous way is when medicare was passed in the law in '65, the average life expectancy was 68, 69 years of age. today it's in the mid 80s. medicare was never meant to cover 20 years of life. >> governor, the one other thing, i do feel this a little bit, i wonder if you do, and you say you're not sure who is going to win the election, but compared to four years ago "the journal" makes a point, this really is kind of a grind to victory that the obama administration is trying to orchestrate, you know, obviously got to expand the gender gap with women and minorities but it's not going to be just a rousing endorsement by a united country to go forward. do you feel that it's a lot different than the hope a

it is rampant and at least 10% of the costs of medicare and medicaid, this $80 billion health care hustle is the subject of the latest cnbc investigation. scott cohn is in new york with a preview. scott. >> why is will this night different from all other nights? that was a different seder i bet. it is now a huge factor in the cost of health care as you mentioned. and we are in the third year of a federal crackdown on health care fraud. the good news, it netted about $4.1 billion last year, that was a record in the amount recovered. the bad news is there's probably $80 billion, $90 billion at least where that came from. we spent about six months on the frontlines with the people fighting this and they are treating it like the crime wave that it is. 6:00 a.m. and we're on the move toward the gated community that's home to gilbert and elaine kim. mrs. kim is just getting ready to leave for work. there's a slight change of plans. her husband is just upstairs. 7:30. the kips are in custody. two of nearly a dozen arrested on this day alone. the kims ran this facility, uri medical in queens, in

do you know that medicare and medicaid didn't exist 50 years ago and they're now a quarter of the federal budget? >> i know. it was supposed to be supplemental. david walker was on the other day talking about obama care which is supposed to save us a trillion dollars and the actual cost, what it added the our entitlement is 12 trillion. just that we did in the last two years. or whenever it was. >> but in terms of where we are now in this negotiation, i believe that both sides in the final analysis want a deal and the compromise is in the revenue side for the president and potentially rates which i think he's serious on and real entitlement reform for the republicans and the american people, markets, business, confidence, the able to move forward in 2013 is all a function of doing both of the things you talk about, joe. having an agreement to avoid the debt, the fiscal cliff, and then having a down payment on actually getting the $4 trillion identified. >> howard dean is a deficit hawk. liberal, but he is a deficit hawk. he doesn't say maybe if we can't get a deal together, maybe we'd be

our problem comes down to three things, medicare, medicaid, social security. you cure that, this is all over with. >> what is the drag on the economy if you went a million bucks and above? >> are you talking just income or income and capital dividends gains in. >> let's do both for kicks. >> you'll immediately drag into 2012 a lot of decisions in selling assets to try to capture revenue or gains in 2012. raising revenue over $1 million may not have that much of an impact but you'll barely grow revenues anyway. what is the difference? it's a red herring when you have trillion-dollar deficits. >> you hear what bill crystal said over the weekends, they're not talking about tax rates but effective tax rates is what ends up happening. >> you know you say red herring but warren buffett will say this is more of a situation of the appearance of fairness. you can cut entitlements if you raise some of the taxes on the higher end so it becomes more of a fair deal and the public looks at it more fairly. >> you look at the entitlements. we have to create a situation where

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half of the obligations are secondary to medicare. and without health care will not be able to manage the debt. >> the cost curve is something that the obama plan has been criticized for not attacking, the cost curve better. what needs to be done? how can we move towards trying to fix that problem in particular? >> i think lots of people have already started on this line. if you look at what we have done at the cleveland clinic, we have reduced redundant tests, we have taken costs out of procedures, out of purchasing. we have gotten more efficient as we gone along. we all recognize we have to do this for us and as the nation as a whole. we can do this. one thing besides getting a more efficient delivery system, we need to decrease the burden of disease in the united states. >> what do you mean by that? >> you can't have people smoking and an epidemic of obesity and still maintain health care costs. right now a third of the united states is obese. that is expected to go to 20% of the health care costs by 02020. one thing disappointing

you know, the republicans gave in on this medicare part-d. they made it so the government does not negotiate with merck and pfizer. shouldn't that be scrapped immediately? the government really come after those guys to get breaks we all know that our hmos -- >> you're talking about when they created the department -- >> i'm just saying negotiate with the pharmacies. wouldn't that be a good way to save some money? >> that was one of the few entitlements i'm not sure i'm crazy about creating another entitlement that came in under budget because it does allow competition by citizens. >> it really crushed those drug companies. why wouldn't you want that? >> when the government's the only purchaser, that's not competition. that's waging price controls and that hasn't worked well in canada or europe when you're trying to develop new drugs. so i do worry a little bit if the government's the only purchas purchaser, i'd rather have 300 million americans making these decisions, they just -- >> you know -- >> trying to find some ways to save money. i as

democrats holding advantages on health care, we're waiting for that ruling from the supreme court on medicare, on social security, on helping the middle class. but romney on another issue that -- and republicans on the other issue that people care about, which is cutting the deficit and reducing spending. >> right. john, we're going to leave it there. thank you for joining us this morning. >> you bet. >> we'll keep our eyes on -- i don't know if it's going to change. >> who hasn't made up their mind? the poll numbers came up to 91%. who in america doesn't know who they're voting for -- i guess -- >> 91%. >> who are they? >> they're going to be the ones that decide the election, those that make up their mind in the last month. >> the nine percenters. >>> coming up, the future of best buy get in the game! [ male announcer ] don't have the hops for hoops with your buddies? lost your appetite for romance? and your mood is on its way down. you might not just be getting older. you might have a treatable condition called low testosterone or low t. millions of men, forty-five or older, may have low t

if i was the president, i would really lead on the medicare stuff. that everybody knows has to get done. >> you'd push more on that than you would -- >> that's -- >> i would want both. i mean, it's on the table now. you saw it. so it's on the table. they want the president to come out front. it's very hard for these guys, let's face what's hard. it's hard for republicans to individually say i want to cut this from medicare, i want to raise this age. everybody knowles it needs to be done. there's one leader. one real leader in this country, and he has to do it. okay. that's all -- i mean, he's the guy, and you know, i agree with him, though, i would like to see that, you know, not cut out like guys are talking about. but move -- let the economy get some real running room. let people -- >> will he rise to the occasion? >> i personally don't know the guy. >> so i -- >> i hope he does that. i hope he -- what do you guys have -- >> rise above. that's for everybody. >> listen, it's not a rise above for everybody. you really have -- it's the president to sh

medicare, he's taken a huge hit for medicare, doesn't touch it until 2023. why does someone think we'll get between now and 2023 -- >> third rail because he can't say 2023 without getting demagog demagogued. >> what would you cut the defense budget by? >> a third. radically tell the generals put your toys way, get out your sharp pencils, we are going to bring this down to a level in real terms that eyisenhower in 1960 said we can live with when we were facing an industrial enemy that was able to do some damage to the united states. >> where would you cut? >> i would means test heavily social security, medicare, drastically reduce defense spending. >> how would you handle medicare? would you like a voucher program? >> it's too late for that. you need to simply means test it, so if you're affluent, you're going to pay a much higher premium. everybody needs to pay bigger copays, bigger deductible. >> the equivalent of raising taxes on some people. >> we have to raise taxes on everybody. the bush tax cuts, all of them, for everybody. we cannot afford them. we co

it's a big medicare medicaid play if you will. so we'll keep an eye on that. >> a lot of new customers. >> shares not moving yet but you are already seeing -- >> see whether they -- >> amerigroup. what did i say? a lot of different ones there. already up at 90 bucks so we'll watch as they jump -- >> except it's not stock and won't be quite as ugly. >> but there will be questions. >> you know you could sell wellpoint but not like the stocks are going to -- >> there could be a -- typically even with cash. >>> coming up, taking off of boeing ceo mcnerney joining us. kelly got tips of how to pronounce it in the other language they speak in the uk. they see a big future in jet sales. ♪ sometimes, we go for a ride in the park. maybe do a little sightseeing. or, get some fresh air. but this summer, we used our thank youpoints to just hang out with a few friends in london. [ male announcer ] the citi thankyou visa card. redeem the points you've earned to travel with no restrictions. rewarding you, every step of the way. c'mon, michael!

. >> medicare alone is 42 trillion unfunded. social security 20.5 trillion. and then you add the 16 that we know about to that. none of these are in black and white those first two that i mentioned. you add it all together, 86.8. >> a lot depends on what happens to medical care. i mean, one thing that could change these estimates tremendously, find a cure for alle alzheimer's. you'll change the estimated how much spending you have to do. if you think over time, many of these forecasts long term forecasts assume no fundamental powerful change. >> find a cure for cancer and everybody livesoff 100. >> but alzheimer's is a very expensive disease. >> but anything that extends life in an expensive way will be -- net i don't think it's cheaper. >> these budget problems are fixable problems that the united states has decided not to fix. this is the decision we're making through our political process. the decision is we're just going to fix it enough to get by another year. we're not going to fix on a grand bargain basis. >> will it pay if we get little bargains over

higher medicare spending, higher retirement spending, and especially something we have to get used to and we're going to have to bump up the share of the economy, that is, from the government because that's the way we're going to have to live if we want to take care of the elderly. mark, is that a reality? does that mean higher -- i'm sorry, lower long-term growth rates for the economy? >> well, yeah. i mean, two things. one is it's right that because of the aging of the population, all else being equal, government spending as a share of gdp will rise because as definition the elderly will be using medicare and social security. but that's not the biggest part of the increase in what's going on in medicare and medicaid and social security. it's really the growth in health care costs. so, if we can control that and bring that rate down, then we'll be fine. we'll be okay. but you're right about the economy. the broader economy. because in the aging of the population, and people retiring, the rate of growth in the labor force is going to slow. it already is slowing and the underlying grow

and indicated some flexibility on corporate taxes and other issues and c.o.l.a.s for medicare. so i think that there's some room here if we can just get the gop to make the movement on their side. they can't even get boehner to get agreement with plan "b" over there. i don't know what's going to happen. >> you wouldn't have done anything with plan "b." susan i was just talking to john kanas about the republicans just -- they can't win for losing here, they're like boxed into a corner. they're going to get blamed for something that maybe the other side was willing to do all along, and the republicans are going to be the one getting blamed and i don't think people are even going to realize that they're being had. >> they certainly fumbled the ball. and the fact is is that they did have an opportunity to really look like they were going to become the party of yes. and they at some point they stopped working with the administration, and that's what they needed. they needed the obama administration to give -- help them get a path wrai to yes. that hasn't happened. i mean we hear a l

and the balanced proposal is going to have to involve medicare. it's going to have to involve medicaid. it's going to have to involve social security. and until the president, the leader of the nation, is willing to step up and be very specific on those accounts, we're really not going to make very significant progress on anything that will substantively impact our long-term debt. now the republicans are equally going to have to be willing to give on the revenue side. and i think that boehner, speaker boehner has been very aggressive in doing that. quite honestly i think he's gone much further than i would have expected him to go on the revenue side. he's essentially said he's willing to give the revenue to the president he wants. he was even willing to give him some rates that he wants. and he's also said, and i think he's right on this, unless you match those revenues with spending reductions he can't pass the house with that. and he shouldn't pass the house with it, because it really is the spending issue that we've got to focus on now. i think

we'll update it to do some medicare and some medicaid so basically, that means we will have done the detail work so to say, and hopefully people can coalesce around adjustments to it but it gives them a memo where there has been bipartisan support. the three most fiscally conservative members of the commission voted for it as a couple of progressives, dick durban. >> unbelievable. >> profile in courage and kent conr conrad. >> kent not as much. judd last night, lani davis and michael steal, i was doing "kudlow" they came in and had this purple, red and blue, get it, purple. >> versus a pink shirt. >> versus a pink shirt, but what strikes me with you is people leave office are bipartisan and nice and talking this election, i'm watching. this is going to be as ugly as anything we've ever -- we are so far from anything conciliatory on either side that there's no way this is going to happen before november. i'm sorry, it's just not. >> it isn't going to happen before november. what you hope is that the elections do not stratify the positions or poison the well where nothing can happen af

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we're at icd-9 which is medicare reimbursement under obamacare. icd-9, 18,000 rules. icd-10, 140,000 rules. but nine separate rules are reimbursement if you're injured by a parrot. there's three separate rules if you're injured by a flaming water ski for reimbursement. people say we need this and it off sets the bureaucratic issues. does it offset the bureaucratic issues? being that granular -- that's a prime example. dodd-frank is the same deal. >> what do i get if i'm injured. >> it depends. there's nine different ways. none of them are pleasant. >> it's crazy. >> depends which body parts are involved. >> you talked about the secretary geithner's column in the journal? >> what do you think of it? >> he gets up at the top. scale and says this is good and you got amnesia. some of it is pretty good. i think increasing capital requirements makes good sense. but why not stream line and take the junk out of there so that, you know, it's concise as opposed to more granular and it has some chance of doing some good. >> who has forgotten about the financial crisis when this

we can't get either side -- you even got seepier citizen republicans that doesn't want to touch medicare, social security, anything else. we have a bipartisan gridlock for teents and we have both sides on the education debate up abe to decide what's wrong really. isn't that really a big issue? >> can woo do charter schools? look at the backlash for charter schools. i think someone came do you know on the side of charter schools but in no way will ne give the okay for that, right? >> we address this whole education problem in the book. we need to recruit our teachers from the top -- where the top performing education systems of the world do this they recruit from the top third or 10% of the class. >> by paying them more? >> and by hiring status. and we need a teacher evaluation system. my sister is a teacher reform system. it's not perfect but it's got it in the balance. she's voldmore -- >> a lot of people have put in an evaluation system that both the eacher's union and administrators many are coming to an agreement it. but we need parents who say to their kid what did do you today, woo

you know, becky, we all know we have to address the medicare issue. and to totally punt on that issue, to me, is incredible. we know we have to address tax reform -- >> we've got to go. >> thank you. >> maybe he meant a good start. just any budget after 1,000 days. >> you know, that's right. we have a budget document. that is a good step. >> i read the whole story while i was sitting here. he said it's a good start to not let it go, be sequestered. >>> coming up, the stock stories the street will be watching today. the latest buzz from the "squawk on the street" team. "squawk" is coming back right after this. [ tires screech ] [ engine turns over, tires squeal ] introducing the 2013 gs, with the lexus enform app suite -- the most connected information and communication technology available in an automobile. [ engine revs ] the all-new 2013 lexus gs. there's no going back. see your lexus dealer. hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i

even when you change it, you either keep the medicare that you have or do it in a different -- >> he said paul ryan's plan would take the $716 billion and put it toward the deficit and i wouldn't. >> i don't think i've ever heard that before. >> yeah, he's said that. did you watch any of the debates during the campaigns? this is the same romney that was in every one of those debates, but -- >> you know what, the narrative changed about a month and a half ago when he chose paul ryan and i think seeing him now -- >> when you started worrying about whether he's an extremist. >> you talk about trying to capture the middle, that's what this is about and i think he did a pretty good job last night. >> "60 minutes" was celebrating 45 years of whatever, the first one they did was nixon and humphrey and celebrating 45 years. when i watched "60 minutes" i wish we had done the interview of both guys. >> i can't fault you in that thinking. >> i appreciated watching though. >> i have a bernie goldberg impression. 45 years, let me ask you this. would you go to either msnbc or fox and have both and

the health care reform that we have proposed in the house, essentially what we're saying is in the medicare program, switch from a defined benefit to a defined contribution outlook. >> and they go crazy. they go crazy. >> the president rejected that, so you're right. >> grannie getting pushed over the cliff so becky's point. >> what we do is look up, no one on their side or at least the president did not embrace bowles-simpson. bowles-simpson is a good start but we believe it fundamentally leaves in place the flawed structure of a washington -- >> the whole point behind bowles-simpson, you take the whole thing, you don't get to cherry pick the parts you like. >> if you look at it it's a good starting point so there's good aspects of tax reform and the rest and there are also good things in social security that bowles-simpson does but in terms of the health care, we can work together and we can look to see some of the kinds of things that it prescribes around the edges, we can at least start there on health care. >> steve, would you take bowles-simpson right now? >> i think eric's right, tha

durbin, very close to the president, talking about the fact that he can live with means testing in medicare. that's number one. on senator mcconnell's list of things he'd like to see done. nancy pelosi is even talking about, you know, it's not about race. it's about revenue. it's about getting the money we need to reduce the deficit. so atmospherics are better. we've got a chance. >> it sounds a lot better. we also try and figure out what the plan actually looks like just in terms of the ratio of spending cuts to tax increases or revenue increases. and there've been a lot of people who've gone back and forth. it started out where we were probably closer to three to one back last summer. and i thought that was what simpson-bowles laid out. then i've also seen something that was circulating last week, suggesting that the simpson-bowles plan really called for a one-to-one ratio. is that true? >> no. what we did is, we took current policy at that time. current policy at that time and bush tax cuts from the top 2% expiring and we took that as the baseline, and then what we did is we reformed the

we have so many people on medicare. they didn't talk about how mitt romney wants to change medicare into vouchers and they want, he wants to gut social security. and you know what? florida is big on education. and president obama is the education president. and his state of the union message he talked about how we should fix crumbling schools, how we need to keep tuition low. how we need to be aware of the class of 2012. what are they going to be doing? they need training, they need -- education. this is it a tragedy. education is the bedrock of this nation and these republican candidates are leaving out everything that's important to the people. they have no message, they have no vision. >> let me talk a little bit about florida and the electorate base there. in the last election, a lot of young people came out in florida in support of obama. now there's a lot obviously of what might be described as disappointed obama voters. does the, the younger generation come out again? >> i think the younger generation will come o

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it doesn't touch social security, it does very little on medicare, almost all of it on the provider side to the point that entitlements as a percent of our budget, we talked about this when i was on the air, about 64% now. when you include interest on the debt and medicare, medicaid, social security, so-called mandatory spending. it's the biggest part of the budget, fastest-growing part of the budget. over the ten-year period, it goes from 64% to 78% of the budget. so i know ambassador spogli is here today, he can tell us what happens in southern europe when you come to an entitlement society, or you can't stop the spending, that's the track we're on. >> i guess, what i was leading to by saying both sides admitted to political. because the democratic will say that proudly, that it was political. because there's no reason to try to deal with republicans on a budget right now, they're going to say no to everything. that the president proposes. so why give a serious budget proposal when it's not going to get anywhere, anyway. why give up ground in an election year? that makes some sense, do

be gotten rid of for everybody, all of them have to and i think we ought to have capitated care for medicare that would save us a hell of lot of money and that should have been in the budget. but i worry about getting rid of the middle tax cut at the end of this year because of the economy. >> arthur? >> david, a quick question for you, i know you're all in favor of being a responsible grown-up here and cutting taxes -- or raising taxes as well as cutting spending. you know, we did a study at ae1, i know you are familiar with it, our chief economist talked about fiscal consolidation across 21 countries in 35 years and what he found was the countries that failed were the ones that actually relied the most on tax increases and the ones that succeeded were the ones that relied almost exclusively on spending cuts. the countries that succeeded in getting out of the debt crisis, 85% of closing their gap actually came from spending -- spending decreases and actually the ones that the did best like finland in the '90s, i know you're familiar with that case, lowered their taxes even though they neede